Silver Price Analysis: Near-term bias remains tilted in favour of XAG/USD bears
|- Silver attracted some buying near the $23.45 region in reaction to the softer US CPI report.
- The lack of follow-through buying warrants caution before positioning for further gains.
- The set-up favours bearish traders and supports prospects for an eventual breakdown.
Silver refreshed daily tops in reaction to softer-than-expected US CPI report, though lacked any follow-through buying. The white metal was last seen trading around the $23.70-65 region, nearly unchanged for the day.
From a technical perspective, the XAG/USD attracted some buying just ahead of August 27 swing lows support near the $23.35 region. Bulls, however, struggled to capitalize on the move and faced rejection near a previous strong support breakpoint, around the $23.80-75 region. The mentioned levels should now act as a key pivotal point for short-term traders and help determine the next leg of a directional move for the commodity.
Meanwhile, technical indicators on 4-hour/daily charts maintained their bearish bias and have also recovered from the oversold territory on the 1-hour chart. The set-up seems tilted firmly in favour of bearish traders and supports prospects for an eventual break to the downside. Hence, a subsequent fall below the $23.00 mark, towards challenging YTD lows around the $22.20-15 region touched on August 8, remains a distinct possibility.
On the flip side, any positive move beyond the $23.75-80 support-turned-resistance might confront stiff resistance near the $24.00 mark. That said, a sustained move beyond might trigger a short-covering move and push the XAG/USD towards the $24.40 intermediate resistance. Bulls might then aim to test monthly tops, around the $24.85 area.
Silver 4-hour chart
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.